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The Pitfalls of Credit Repair


When I see a company that “specializes” in Credit Repair I cringe.  It’s painful to see those who promote their credit repair specialties credit-score-imageand it makes me wonder, “Who’s buying into the snake oil and pixie dust we call credit repair?”  Well, a lot of people actually.  As a mortgage consultant who has lived through the credit crunch, the real estate and mortgage meltdown, the recession or whatever you choose to call it, I can tell anyone I advise that I’ve been there, done that.  I’ve been through it – Both on the professional side and on the personal side.  And I can attest that Credit Repair simply does not work.  Not only have I seen that it does not work for past clients over the last 14 years, but I’ve been through it personally.  I’ve spent a little money at a time and I’ve spent a lot of money towards credit repair and each time it has never ever worked.  Am I the lone individual that it just didn’t work for?  I sincerely doubt it.  People have sometimes asked, “Well how good of a mortgage consultant can you be if you’ve had some of these issues?”  And I can confidently say that I am a BETTER mortgage consultant because I have.  I’m not one of these consultants who live up in my ivory tower telling people how they need to do it.  I’ve been in the trenches with you.  I’ve actually lived through the highs and lows and I can relate to what you may be going through.  At the time did I ever think it would be a blessing?  Absolutely not!  Indirectly it certainly has been in the long run.  But I digress.

Think about it.  Even if your past financial sins and transgressions are somewhat behind you and you’re back on your feet – When it comes to wanting to buy a house, how badly do you wish your credit mishaps would just disappear?   Almost anyone!  Who wouldn’t?  So when it comes to the credit repair pitch, most are tempted to throw their money at these credit repair companies who promise you they can magically fix them and leave you with soaring credit scores once again.  Used to be the credit repair companies would charge anywhere from $300 to $1,200 per client depending on what the scenario called for.  This in turn was a shock to most people (although people would reluctantly pay it) because of such a large chunk of money required up front.  Eventually the credit repair companies got wise and thought they would just charge smaller monthly retainer fees of $75-$99 per month.  This is much easier for would be clients to handle.  It’s all about perception and marketing.  But look at it this way.  If a repair company is telling you they will charge you this monthly fee until they get the results you’re looking for and they tell you it can take anywhere from 3-9 months or even a year depending on what you have to work with, how much are they making?  Are you doing the math in your head right now?  I thought so.  And while you are being honest with yourself, can you really see them contacting you one day and saying, “Congratulations!  All your credit issues have been resolved!  We no longer need to charge you the monthly fee.”  Yeah, right.  They’ll keep charging you that fee until the cows come home.  Sadly, you’ll have to be the one that says enough is enough.

But here’s the real kicker – Not only are they collecting their monthly fee while you’re building this internal false sense of hope that they are simply going to make these blemishes on your credit go away, all they are really doing is disputing these bad marks to the creditors and bureaus with letters by mail.  The reason is because by law, if those creditors do not respond to your disputes in writing within 30 days, then they must remove those marks.  IF the creditors did not respond in writing, in turn, that would re-adjust your scores and make them go back up.  But I’m here to tell you that almost never happens.  And when and IF it did, it was simply due to dumb luck that it fell through the cracks and something got lost, etc.  Of course, credit repair companies know this and will cling to this lone rogue success story and tout it as if it is the norm and look what we can do for you type  marketing.

What’s more, here’s something else clients do not realize.  And why would you? Not only are these companies filling you with false hope, slowly draining your hard earned money by instituting terrible and faulty repair tactics, they are creating a wake of a mess that you are left to clean up only after you pull the plug due to eventual frustration and fatigue from not seeing the results you ever imagined.  At the time of application when I pull and look at a client’s credit report and I see the words, “Consumer Disputes” or “Disputed” on one or multiple trade lines, I’m here to tell you that is the kiss of death to an underwriter.  Those words will need to be removed/resolved before we can go any further in the underwriting process or get you a loan.  So, not only did the credit repair company NOT get you the results they promised, they left you needing to call or write letters to all the bureaus asking them to please remove the Dispute verbiage for each trade line and that you are no longer disputing because you’re now looking to obtain a home mortgage and cannot show that on your credit.  Congratulations on your new 2nd or part time job by the way!

Magic HatYou want the hard truth?  There is no magic formula for repairing your credit except for time – Time and establishing new credit that is.  Occasionally, I have someone who has enough money to pay down high credit balances, etc.  This will usually bring a client’s scores up 15-60 points if one can pay the balance down to below 30% of the max credit limit.  In this case I would simply run a score simulator for you for free and see how much that would raise your scores and if that would get you the credit score you need to get a good home loan.  If it does, I would have you pay that balance(s) down and then we would do what we call a rescore.   We just have to show the bureaus the balances have been paid down with proof or paper trail and they would do what we call a rapid rescore.  This allows us to get new adjusted scores within 72 hours or less rather than wait for the normal 30 day cycle.  But when it comes to 30, 60, 90 day lates, charge offs, bankruptcies or foreclosures that actually happened to you and you went through?  I’m sorry.  There is just nothing anyone can ever do to get those removed.  Even paying a charged off item will not help.  The damage as the saying goes has already been done.  I one hundred percent guarantee that you are allowing yourself to be duped if someone says that they can do this for you.  Even if you really want or feel that there is an error being reported you can contact with a phone call or in writing a dispute to the bureaus and creditors yourself.  It’s very simple and it’s free.  Don’t think that it is a daunting task because it really isn’t.  I’m not guaranteeing the results.  But I do guarantee that you don’t need to pay any repair company to do it for you.

In summation, I am not here to paint a doom and gloom canvas – Quite the contrary.  I’m saving you hundreds maybe even a couple thousand dollars by telling you this.  I simply want you to know if you’re thinking about credit repair what to expect and what is available to you.  If you simply find the right mortgage consultant, they can guide you through what can or can’t be done.  And can do it for you all for free!  In many cases I have loan programs for lower credit score borrowers which do not focus as much on a few credit dings here and there – So, why even look into credit repair?  If I can get you into a loan your credit score alone would go up just by showing you’ve been paying on a new mortgage in timely fashion over the next 6-12 months.  And if you can’t get a loan just yet, someone like myself should be able to tell you why and what you can work on to do so in the future.  It may not be easy but I would rather you be working on items in the right way than to be throwing money away only to find out you were never going to be able to buy a home just yet.  This is the stuff they don’t teach in schools.  This is the stuff that unfortunately can only be maneuvered through experience and with the proper guidance.  Why not let me help.

Green House Mortgage is a full service home loan origination entity in Tampa, FL and servicing the state throughout – We can do loans anywhere in Florida! If you have any questions regarding this article or simply need mortgage advice please call 813-732-3155 or email us at We are dedicated to giving you the best mortgage consultation available. Green House Mortgage – It Pays to Go Green!

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